Alexa & Co. holds 40% of the total common shares outstanding of Olivia LLC. During the current year, Olivia LLC declares and pays a $100,000 cash dividend on its common shares and reports net income of $500,000. What effect will Olivia LLC's earnings and dividend have on Alexa & Co's financial statements? Note that Alexa & Co has not elected the fair value option for this investment.

Answer rating: 100% (QA)

As Alexa Co holds 40 of the total common shares outstanding of Olivia LLC it has a significant influ... View the full answer